A few months back, The ABC reported that the federal government was preparing to write-off billions of dollars of higher education loans on the back of a blow-out in bad debts relating to the scandal-ridden vocational education and training (VET) sector:
An ABC Freedom of Information (FOI) investigation has revealed the Government is forecasting losses of more than $13.5 billion on just four years’ worth of loans…
The amount never to be repaid on loans issued in 2018-19 is predicted to exceed $4.4 billion — a budget hit nearly four times higher than expected from loans issued last financial year…
A recent Government budget update showed more than 20 per cent of debt issued in 2018-19 was not expected to be repaid, with the average amount of debt tipped to be $22,500…
Now, Fairfax has revealed that private VET courses are costing taxpayers seven times as much as publicly funded TAFEs:
Taxpayers forked out $73,200 per graduate from private colleges on average, but only $10,500 per graduate in TAFE courses in 2014…
The analysis, done by the NSW Greens based on the federal Department of Education and Training’s funding figures and the number of vocational graduates in 2014, comes in the wake of several scandals in the private vocational sector in which dodgy providers have been exposed allegedly recruiting vulnerable people into government-funded courses they had little hope of completing by giving them laptops or iPads.
In one case, the Sydney-based AIPE, a Senate committee heard the college received $111 million in Commonwealth funding after handing out just 117 diplomas in 2014…
NSW Greens MP David Shoebridge said the privatisation of vocational training “has been a comprehensive failure” that both major parties shared responsibility for…
The Grattan Institute’s new report entitled HELP for the future: Fairer Repayment of Student Debt, highlighted in all its glory the escalation in HELP loans and doubtful debts:
Much of the rise in bad debts has come from the private VET sector, which has been subject to widespread rorting.
The obvious first solution is to crack-down hard on the VET sector to ensure that only the best courses/providers receive public funding.
Another is to adopt the Grattan Institute’s proposal to lower the repayment threshold on HELP loans to reduce costs to taxpayers and forestall the need to slash university funding.
Earlier this year, the Turnbull Government pledged to take action against dodgy providers, developing a “hit list” of training courses set to lose public funding. Under the plan, only high priority courses on an immigration-style list of workforce shortages — such as trades, computing, nursing, childcare and aged care – would still qualify for significant HELP loans.
Labor has also promised to rein-in spiralling VET FEE-HELP debt by implementing a loan cap of $8000 a year along with tougher compliance measures.
The implementation of demand-driven training systems across Australia was supposed to give students greater choice and make providers more responsive to students and employers. Instead, Australia has produced a wasteful system that has produced a huge Budget blow-out and poor education outcomes.
Whatever the approach to reform, the VET system needs to be reined-in big time with dodgy operators kicked to the curb.
